Direct Marketing with Consumers

Farmer’s market is an innovative scheme introduced by the Government of Tamil Nadu, to help the farmers at large. It is the first of its kind in whole India.

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Co-operative Marketing Society

When producers of agricultural commodities or any other product form a society with an objective of carrying out marketing of their produce, such society is called as co-operative marketing society. The need for co-operative marketing arose due to many defects observed and experienced in the private and open marketing system. Those are

1. Several malpractices prevail in the marketing of agricultural produce. For example, arbitrary deductions from the produce, manipulation of weights and measures and cheating the farmers, collusion between the broker and the buyer while fixing the prices, delay in payment of amounts due to farmers, etc. The result is the farmers are indebted to trader - moneylender. In such circumstances co-operative marketing society can largely help the farmers reduce the malpractices and offer honest and correct services.

2. There exists a chain of intermediaries between the producer and the final consumer. They include village merchant, itinerant trader, wholesaler, commission agent, pre-harvest contractor and retailer. They take their own margins for the services, they render. But these margins are generally ex-orbitant, making the commodities costly for the consumers and reducing the producer's share in the consumer's price. A co-operative marketing society can eliminate some or all of the intermediaries and can reach to the consumers and establish direct trade relations with them. This will make commodities cheaper to the consumers and also ensure good quality of produce to them because much of the handling is avoided.

3. There are some services such as transport, storage, financing, grading, packing, loading/unloading which are carried out by some private functionaries who charge high rates for these services. A co-operative marketing society performs these services efficiently and at cheaper rates.

4. A co-operative marketing society provides market finance to farmers and ensures better returns to their produce. Besides marketing society can act as an agent of credit co-operative society and help to recover loans advanced by credit societies. At present, most of the financial needs of the farmers are fulfilled by trader - moneylenders at very high rates of interest and with the condition that they will sell their produce through them. This can be avoided, if there is co-operative marketing society.

ORGANISATION:

Under the system of co-operative marketing whole responsibility of marketing is taken up by the farmers themselves, organized on co-operative basis. The area of operation of marketing society is usually fixed with reference to local conditions - area based or commodity based. The commodity-based societies related to grapes, oranges, banana, pomegranate, etc. have wider jurisdiction covering the major areas growing each crop. There are societies at the producer's level and they federate at state or national level to deal with bigger markets including foreign markets for export of their produce.

Membership :

Membership of a co-operative marketing society is open to individual farmer who produces the crop for which the society is formed. Other co-operative societies in the area can also become institutional members.

Resources:

The sources of fund of the society are as under:

1. Share capital

2. Deposits.

3. Loans from higher financial institutions including NABARD.

4. Grants or subsides from the Govt. for godowns, etc.

5. Reserve funds.

The marketing societies require short-term, medium-term and long-term capital

1. Short-term capital is needed for financial advances to members for production, packing, transport, etc. to meet contingent expenses.

2. Medium- term capital is required for purchasing motor trucks, etc.

3. Long-term loan is required for installation of machinery, construction of building for godown, storage, etc.

Functions :

1. To arrange for the sale of members produce to the best possible advantage.

2. To undertake activities in connection with grading, pooling and procurement of produce of the members.

3. To provide storage facilitates to their members by renting or owning the godowns and thereby facilitate to grant advances against pledge of produce.

4. To protect members from all types of malpractices eliminates the middleman in the chain of marketing.

5. Co-operative marketing society ensures grading, etc. and supply of good quality material to consumers.

6. It teaches business methods to farmers and serves them as agency for supply market information.

7. The society is able to stabilize prices over a long period by adjusting the supply with the demand.

8. Marketing societies are also encouraged to undertake export trade so that they can give better prices to their members.

Weak Co-op. Marketing :

Although, many advantages are envisaged in the co-operative marketing the structure has remained relatively weak as compared to credit co-operatives. There are only about 1000 marketing societies as against 20,000 credit societies in Maharashtra. The marketing is more difficult involving many technical and commercial aspects. Marketing of perishable is still more different. Arranging quick transport, arranging storage to avoid losses, to keep watch on demand - supply position to ensure good prices to members are all matters need for good marketing. For want of these managerial aspects, desired number of co-operative marketing societies have not come up and those which were started could not succeed. Several marketing surveys/studies at farmer's levels have revealed that among several marketing channels, co-operative channel has offered greater share of consumer's prices to the producers. Whichever, marketing is unorganized, farmer - producers have expressed that marketing co-operative societies should be formed. This was particularly reported in the cases of marketing of perishables.

Few Successes:

Inspite of the difficulties encountered in the marketing of perishables like fruits, vegetables, milk, etc. there are few examples of good success.

1. Maha-grape - co-operative federation marketing grapes in Maharashtra.

2. Co-operatives marketing pomegranate.

3. Co-operatives marketing banana in Jalgaon district.

4. Vegetables co-operatives in Thane District.

5. Milk co-operatives in Maharashtra and Gujarat.

6. Co-operative cotton marketing societies.

Agri - Knowledge
(Agricultural Marketing)